Make homeownership possible
Discover how much house you may be able to afford, estimate monthly payments, and explore various scenarios effortlessly. Take control of your homeownership dreams and unlock the potential of this intuitive calculator today!
Mortgage Loan Amount: total loan amount you are borrowing from a lender to purchase a property.
Interest Rate: is the percentage charged by the lender for borrowing the money on an annual basis. The interest rate determines how much interest you will pay over the life of the mortgage.
Mortgage Period: also known as the loan term, is the duration over which you will repay the loan.
Monthly mortgage payment: is the amount of money you will need to pay each month to the lender. This payment will include both principal and interest.
By using a mortgage calculator, you can quickly estimate your monthly payment and the total cost of your mortgage based on different loan amounts, interest rates, and mortgage periods. It helps you make informed decisions when planning your budget and evaluating different mortgage lenders.
Purchase price of home: $300,000
Down payment: $60,000
Annual Interest rate: 4%
Monthly Interest Rate: 0.333% = (4%/12)
Mortgage period: 30 years
Monthly payment = 280000 * 0.00333 * (1 + 0.00333)^(360) / [(1 + 0.00333)^(360) – 1] = $1,264.14
This means that the monthly mortgage payment for a $300,000 home with a 20% down payment and a 4% mortgage rate is $1,264.14.
The mortgage payment formula can be used to only calculate the monthly payment for fixed-rate mortgages
It is important to note that the mortgage payment formula is just an estimate. The actual monthly payment may be higher or lower depending on the terms of the loan and the borrower’s credit score.
Invest in stock, funds, and crypto.
A Public.com portfolio unlocks a unique investment experience, with information tailored to each individual's portfolio.
When you’re buying a home, it’s important to know how much you can afford. Here are a few things to consider:
Your income: How much money do you make each month? This is one of the most important factors in determining how much house you can afford
Your debt: How much debt do you have? Lenders will look at your debt-to-income ratio, which is the percentage of your monthly income that goes towards debt payments.
Your down payment: A larger down payment will lower your monthly mortgage payment.
Your desired monthly mortgage payment: How much can you comfortably afford to pay each month?
Once you’ve considered these factors, you can use a mortgage calculator to get an estimate of how much house you can afford. It’s important to remember that this is just an estimate, and your actual monthly payment may be higher or lower depending on the terms of the loan and your credit score.
When you apply for a mortgage, the lender will look at your income, debt, credit score, and other factors to determine how much you can borrow. They will also use a mortgage calculator to get an estimate of your monthly payment.
The lender will then use this information to determine your debt-to-income ratio. This is the percentage of your monthly income that goes towards debt payments, including your mortgage, car payments, student loans, and other debts.
The lender will also look at your credit score. A higher credit score will qualify you for a lower interest rate, which will lower your monthly mortgage payment.
Once the lender has considered all of these factors, they will make you an offer on a mortgage. The offer will include the amount of money you can borrow, the interest rate, and the terms of the loan.
It’s important to shop around for a mortgage and compare offers from different lenders. This will help you get the best possible deal on your mortgage.
The initial borrowed amount that decreases with each payment for most mortgages, building equity.
The cost of borrowing money based on the interest rate and remaining balance. Higher in the early years, decreases over time.
Included in mortgage payment, funds property expenses like taxes and insurance. Held in escrow account by the lender.
a. Property Taxes:
Imposed by local governments based on property value. Paid through monthly installments in escrow.
b. Homeowners Insurance:
Provides protection for property damage. Divided into monthly payments through escrow.
Required for down payments under 20%. Protects lender until certain equity level is reached.
May include HOA fees for shared amenities and MIP for government-backed loans.
Understanding mortgage costs is vital for planning. Consider principal, interest, escrow payments, PMI, and additional costs to manage payments effectively. Review loan documents and consult with the lender for clarity.
Refinance to a lower interest rate. This is one of the most effective ways to lower your monthly mortgage payment. If interest rates have gone down since you took out your original mortgage, you may be able to refinance to a new loan with a lower interest rate. This can save you hundreds or even thousands of dollars each month.
Make a larger down payment. The more money you put down on your home, the lower your monthly mortgage payment will be. This is because you’ll be borrowing less money, which means you’ll have to pay less interest over the life of the loan.
Extend the term of your mortgage This will lower your monthly payment, but it will also increase the total amount of interest you pay over the life of the loan.
Get rid of mortgage insurance. If you have private mortgage insurance (PMI), you can usually get rid of it once you’ve reached 20% equity in your home. This will lower your monthly payment by hundreds of dollars.
Pay more than the minimum payment. Even if you can only afford to pay a little bit extra each month, it will help you pay off your mortgage faster and save money on interest.
Shop around for a better homeowners insurance rate You can save hundreds of dollars each year by shopping around for a better homeowners insurance rate.
Appeal your property taxes. If you think your property taxes are too high, you can appeal them to your local tax assessor. You may be able to get a reduction in your taxes, which will lower your monthly mortgage payment.
It’s important to note that not all of these options will be available to everyone. Your individual circumstances will determine which options are best for you. If you’re considering any of these options, it’s important to talk to your lender or a financial advisor to get more information and see if they’re right for you. Remember, even a small reduction in your monthly payment can make a significant difference in your overall financial well-being.
Invest in stock, funds, and crypto.
A Public.com portfolio unlocks a unique investment experience, with information tailored to each individual's portfolio.